September 5, 2022 real estate

Unofficial rental terms dictate market in Kuwait: Al-Ghanem


KUWAIT: When you decide to move from your current apartment to another, usually it is a matter of choosing the specifications you are looking for, like the number of rooms, area of the flat, number of parking spots and so on. But nowadays, tenants are burdened by new conditions, such as cancelling the rent-free grace period given to tenants from the day of the signing of the rent contract to the day the tenant moves to the new apartment. In addition, it has become mandatory for tenants to pay a deposit of half or full month’s rent in advance (although it will be refunded when leaving the apartment). Finally, the real estate office demands a commission of half or full month’s rent that tenants have no choice but to pay.

These issues are not only putting pressure on tenants, but have led to a decrease in demand for apartments. Kuwait Times spoke to Qais Al-Ghanem, real estate expert and former secretary of the Kuwaiti Real Estate Union to discuss the issue. “Despite there being no official rules or regulations that permit the previously mentioned issues, it has become a kind of common law that controls the rental market,” Ghanem said. “These rules are part of an imported culture adopted by some nationalities who control the real estate market in Kuwait, especially the rental market. These conditions were not seen in Kuwait in the past. This is a new culture in the rental market that we are not used to,” he claims.

On the other hand, Ghanem pointed out that despite the financial pressures that could burden the tenants, it is a legitimate right for the building or apartment owner to ask for a deposit due to the damage some tenants cause to the apartment, so the owner will use this money to repair the flat. Regarding the laws and regulations in Kuwait related to this issue, Ghanem said there are no laws in Kuwait that regulate or control these practices by real estate offices. If there is a ministerial decision regulating this issue, then it won’t be a problem,” he said.

Ghanem stressed that a lack of workers and high wages have affected the market and placed an additional burden on the tenants. “There will not be any solution or laws about these issues in Kuwait due to several factors such as supply and demand and marketing and services that differ from one company to another,” he said.

Kuwait Times spoke to real estate office workers to ask them about the reasons they have tightened their rental terms. “When investment building owners rent their apartments through our offices, they are rid of the pressure of dealing with tenants, which pushes us to apply restrictive conditions,” Ahmad Saeed said. Fares Abdullah said that the market is based on demand and supply, and people can choose whatever they prefer. But these policies help the office to pay for basic materials, annual repairs and wages, that are all rising. “We are under financial pressure as well,” he said.

So if the rent of an apartment is KD 500 a month, after adding the deposit, office commission, cancelled grace period and the rent that the tenant is paying for still residing in their previous apartment, the total amount that a tenant will pay before shifting will be around KD 2,000, not to mention the costs of moving itself.

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